The number of craft breweries in 2020 reached an all-time high of 8,764 in the United States. Whether you are an amateur brewing a few kegs of beer at home and considering how to open your own business, you may wonder about the cost to start a brewery.

The cost to start up a brewery is staggering but can render you a nice profit. A review of more than 100 brewery clients revealed a 60% to 70% profit margin.

Start-up plans include deciding on a brewery name and logo. You must also create a business plan, follow legal obligations, and predict income. If you are wondering about the average cost to start a brewery, here are the expenses you need to consider.

Cost of Equipment

The most significant cost to start up a brewery is the equipment. Most start-up costs range between $500,000 to $1 million. This will vary depending on whether you are going with a small one-barrel system, a 30-barrel system, or somewhere in between. When purchasing consider whether you want to start small and risk outgrowing your equipment or location, or whether to start big, allowing room for expansion.

Brew kettles are an integral part of the brewing process. They operate at very high temperatures and are usually the first significant investment a brewer makes.

Quality is imperative, and the stainless steel steam jacketed, gas-fired, and insulated commercial brew kettles from glaciertanks.com are an excellent choice. These kettles are available in everything from a 3 barrel to a 30+ barrel system, ideal for commercial and craft brewers.

In addition to the kettles, you need to consider plumbing needs, electrical wiring, food-grade flooring, cool room, tap system, and more for bottling and selling your brew.

Location and Building Costs

Determining the average cost to start a craft brewery must include the size and function of your brewery. Think about whether you plan to use the building solely for the purpose of brewing beer, or whether you want to sell the bottled product, have a taproom, or incorporate a restaurant.

A good habit in planning anything for this type of business is to take your estimation of costs and double it to cover anything you haven’t thought of or changes that need to be made in the process.

Licensing and Government Regulations

A federal brewing license is free, but every state establishes its own costs for licensing, taxes, fees, bonds, and insurance. You are likely to wait about four months for a response from the federal government and possibly more from your state.

The Cost to Start a Craft brewery Includes Reinvesting

When figuring out what to add to your “how much does it cost to start a brewery” worksheet, don’t forget about reinvesting back into the business. Once money starts rolling in a substantial amount of your profit will need to be put back into the business to keep it growing. The longer you are in business, the more profit you will recognize on the books.

Problems Include Bad Batches

With every business, there are problems that can set things back financially. When you are getting started in the craft brewing business, not every batch of beer will turn out well.

You may need to purchase special refrigeration trucks and tenting to participate in festivals, tasting events, and more. Always prepare for the unexpected when running a brewery business.

Don’t Be Intimidated by the Cost to Start a Brewery

The cost to start a brewery may seem intimidating, but this business continues to gain popularity every year. It is innovative, allowing for self-expression and fun with brew development, tastings, festivals, and more. Don’t hesitate to get your brewing toes wet and take the plunge into developing a lucrative business.

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